Muja AB closure to cost $20m

State-owned power provider Synergy will fork out an extra $20 million to close down the Muja AB power station in a final sting in the tail for the ill-fated refurbishment of the plant.

After spending $308 million rejuvenating Muja AB only for the State Government to pull the plug on the project, Synergy confirmed it had made a $20.3 million provision for decommissioning the coal-fired generator.

The revelation adds to a tale of woe that began in 2009 when the former Barnett government controversially decided to refurbish the ageing facility — about 20km east of Collie — to bolster South West energy supplies.

However, the project was plagued by problems from the outset, with technical and engineering difficulties leading to multiple cost and time blowouts.

Last month’s special inquiry into the financial dealings of the former government by John Langoulant lambasted the project as poorly managed and beset with “significant shortcomings”.

In answers to Opposition questions in State Parliament, Synergy revealed for the first time the costs of closing down the 53-year-old plant and rehabilitating the site.

The utility said the total of $20.3 million was part of a “group decommissioning provision” of $310 million.

Synergy boss Jason Waters previously told an Upper House estimates hearing into the corporation’s annual report that the provision was not a blowout in the refurbishment because decommissioning would have taken place regardless.

“That amount would have been spent irrespective of whether the project was rejuvenated back in 2009,” Mr Waters said.

“That was always something we carried.”

First budgeted at $150 million and designed to be financed entirely by the private sector, the revival of Muja AB was beset by repeated blowouts in its cost and time frame.

The final cost of the project was more than double the original estimate and it was delivered 18 months late.

Even after the refurbishment was completed, Muja AB was plagued by operational and reliability problems, generating electricity just 20 per cent of the time.